Consumer World Exclusive
NETWORK TV NEWS-TALK SHOWS GET "SECRET" PAYMENTS
FOR PRODUCTS HYPED ON THEIR PROGRAMS
(BOSTON) - “Deal” segments offering limited-time, deeply-discounted bargains to TV watchers are proliferating on daytime television shows such as ABC’s Good Morning America (GMA), The View, and NBC's Today show.
What most viewers probably don’t realize is that the networks have a new “secret” financial interest in selling the products shown -- they get a cut of each sale.
In these segments, show hosts or guest presenters demonstrate five or six products, state their full retail price, and then announce a deep price cut typically good for the next 24 hours only. Viewers are then directed to a special show website to make their purchases.
The networks have cleverly converted a common web concept to television – affiliate marketing – whereby those who refer shoppers to sellers earn a commission for each resulting sale.
To do this, a website specially set up for the network takes orders, tracks them as coming from the show, and passes them on to the actual sellers.
“These shows in essence are airing mini-infomercials masquerading as bonafide program segments multiple times a week,” commented Consumer World founder Edgar Dworsky. “Viewers have a right to know upfront
that they are really watching an ad and that the gushing product comments of the shows' presenters could be influenced by the networks’ likely desire to maximize sales and commissions.”
None of the programs clearly discloses to viewers at the beginning of these deal segments that the network has a financial interest in promoting the products shown, according to Dworsky.
Some make vague oral statements like “We’ve partnered with vendors for at least half off.” ABC programs use inexplicit, fine print disclosures at the end of the show or segment in the credits indicating that “promotional consideration” and/or “financial consideration” were received from the products’ makers.
Disclosure in credits on ABC's The View
Viewers of GMA and The View first learn that ABC makes money on the sale of each item only if they spot the tiny disclosure below at the bottom of the ordering page on their special websites. (A little larger version for GMA also appears at goodmorningamerica.com/shop.)
Disclosure at GMADeals.com that ABC receives a fee on purchases
ABC is not alone in quietly collecting affiliate-type commissions. On NBC's Today show, viewers are only let in on the "secret" via an explicit but fine print disclosure at the end of their Steals & Deals segments. No disclosure of the payments is made on their special website, deals.today.com, however.
Disclosure at the end of NBC Today show's Steals & Deals segment
Under the FCC’s “payola” rules, if a program’s producers receive payment to feature a product, that fact must be disclosed to viewers during the program. Similarly, the FTC has two separate sets of advertising guidelines, both requiring clear and timely disclosure: (1) if there is any financial connection between a presenter and the products being touted [endorsement and testimonial guidelines], and (2) if the presentation looks like a regular part of the program
but is in fact commercial in nature [native advertising guidelines].
Disney-ABC did not respond to four inquiries seeking an explanation of the payment arrangements in deal segments between product makers and the network. However, a vendor who participated in a previous GMA Deals & Steals segment confirmed to Consumer World that ABC uses a commission structure whereby it receives a percentage of the sales. NBC did not respond to two inquires.
NOTE: Full details of Consumer World’s investigation of TV “deal” segments, including video clips, appear at its MousePrint.org website which each week examines the fine print of advertising.
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